You could be eligible to purchase or “buy back” service to increase your OMERS pension in a few different ways. You may have unpurchased past service with an OMERS employer – for example, if you worked as a lifeguard for a municipality but didn’t enrol in the OMERS Plan, you may be eligible to buy back that service.
You may also have past service related to your prior participation in another registered pension plan (RPP). This includes a defined benefit (DB) or defined contribution (DC) pension plan registered in Canada. In the case of past service in a DB plan, it must already be transferred out of that plan (for example, to a locked-in retirement account (LIRA)).
If you are interested in purchasing past service, review your options as soon as possible. In many cases, your buy-back cost will increase over time, particularly as your contributory earnings grow or you get closer to retirement age.
You must currently be a working member (also called an active member) to be eligible for a buy-back. In other words, you must currently be employed by an OMERS employer and contributing to the Plan or on a disability contribution waiver to be eligible for a buy-back. Eligibility to purchase service is also subject to legislated tax rules.
If you are rejoining the OMERS Plan after transferring out your commuted value (CV), you will have to wait five years from the date you transferred your CV before you can buy back the service associated with your CV.
If you are a retired member or a deferred member (someone who left their OMERS employer but kept their pension in the Plan), then you do not have the option to purchase past service. Similarly, if you are receiving an OMERS pension as a survivor of a member who died, you cannot purchase additional service.
You can purchase past service from both OMERS and non-OMERS employers if you were part of a DB or DC registered pension plan or in the waiting period to join.
Service with a prior employer that offered participation in other types of retirement savings vehicles (such as a group RRSP or deferred profit sharing plan (DPSP)) are not eligible for a buy-back with OMERS.
When you purchase past service with an OMERS employer, you can buy the time that you were employed and scheduled to work, increasing your total pension amount. For example, if you were a part-time employee of an OMERS employer who worked two days a week (40% of a full-time schedule) and did not immediately join the OMERS Plan, you can purchase the period of time that you worked. The rest of the time (60% of the time you were employed but did not work or receive earnings) can be added as eligible service to your membership record to help bring you closer to an earlier unreduced retirement date.
Most periods that you were on a leave of absence with an OMERS employer that were not previously purchased through the OMERS leave purchase option is also eligible for a buy-back.
Purchasing past service from a non-OMERS employer adds credited service to your record, thereby increasing your total pension amount, and may help you retire earlier with an unreduced pension or smaller reduction.
If your non-OMERS employer provided a DC plan, a specified multi-employer plan or your prior DB plan was transferred to a LIRA or RRSP, you may be able to purchase that service.
If your previous employer’s pension plan was a DB plan and you left your pension in that plan, you may be able to transfer that service. Reach out to the administrator of your other pension plan to see if transferring this service is an option.
If the service you are purchasing is related to your participation in a registered pension plan with a non-OMERS employer, no eligible service can be added to your OMERS membership record in respect of time that you did not work (this includes time that you were a part-time employee and not working or did not have earnings and any leaves of absence during which service or earnings were not recognized under that plan).
If you are unsure if you have service you can buy back, ask yourself the following questions:
Did you work for another OMERS employer?
Did you participate in a prior employer’s DC pension plan?
Did you have to wait to join a non-OMERS employer’s DB or DC plan in the past and not purchase the service related to that waiting period?
Did you cash out or transfer a pension from a previous employer’s pension plan after 1991?
Did you take a leave (e.g., parental leave) with an OMERS employer but didn’t purchase the leave before the deadline?
Did you transfer service from another pension plan into the OMERS Plan that resulted in a shortfall (i.e., where the amount transferred in didn’t purchase the same amount of service in the OMERS Plan that you had in the other plan)?
If you answered “yes” to any of these questions, you may be able to buy back service.
You can easily identify if you have past service to purchase by logging in to myOMERS and answering a few questions. Based on the answers you provide, we will guide you through the steps to purchase your past service.
If you think you have eligible service that is not on your OMERS record, let us know as soon as possible or check your recent Pension Statement to see if the service is accounted for or not. If it is not, have your employer fill out a Form 168 – Proof of Eligible Service or send us a Form 169 – Statutory Declaration for Proof of Eligible Service (if your previous employer is not able to complete Form 168 – Proof of Eligible Service) and include the required supporting documents.
OMERS offers flexible payment options to help you purchase your past service:
Pay the full cost of the service in one lump sum
Pay over 12, 24, 36, 48 or 60 months through a monthly payment plan
Pay through a combination of a lump sum and a monthly payment plan
You can make lump sum payments to purchase your past service through a personal cheque or money order payable to OMERS or by making a payment through your Canadian bank as a bill payment. If you make your purchase using one of these methods, OMERS will provide you with a tax receipt for your contributions. Review the information below about eligible deductions.
You can also purchase your past service by transferring funds from an RRSP, LIRA, Additional Voluntary Contributions (AVC) account or another RPP.
Monthly payments can make it easier to manage the cost of purchasing past service. Payments are made over 12, 24, 36, 48 or 60 months through pre-authorized debit withdrawals from your bank account. You will be charged an annual interest rate on your payment plan. The service is added to your record as your monthly payments are received.
If you want to stop payments during the payment period, or if there is still service remaining at the end of the period, OMERS can recalculate the cost and set up a new monthly payment schedule for you.
Register or sign in to myOMERS today to initiate the process to purchase your past service.
It’s important to consider how purchasing past service fits with your retirement plans.
If you stay with your OMERS employer until retirement, purchasing past service can increase your pension in retirement.
If you leave your OMERS employer, the commuted value paid out when you leave may not justify the cost of buying the purchasable service available to you.
Consider your options carefully before you make a decision and think about speaking to a financial planner to see if it’s right for you.
Your cost is based on factors such as your age, salary and when the service occurred. It is an “actuarial value” or what your future pension is worth in today’s dollars with the added service.
Use the Retirement Planner tool in myOMERS or contact OMERS Member Experience to see how purchasing past service may increase your pension.
Your buy-back costing will remain in effect for three months. If you decide to proceed with the purchase after this time, we must recalculate the cost of your buy-back, which will likely be higher. The cost typically increases as you get older, which reflects the increasing value of the OMERS benefit as you approach retirement.
If you leave your OMERS employer while you are in the process of completing a buy-back (including to retire), you must complete the purchase within 30 days.
You cannot reverse your purchase and it will be used to determine your OMERS pension. Money used to pay for the service you are purchasing becomes locked-in.
If you leave your employer before your early retirement date, you have the option to keep your benefit (including the purchased service) in the OMERS Plan or transfer it to another pension plan or LIRA, however, you would not have the option of a cash refund.
If you leave on or after your early retirement date, you become eligible to retire and start receiving your OMERS pension, provided there is a complete end to the employment relationship.
Some service with an OMERS employer, excluding certain leaves of absence, that is eligible for a buy-back counts as eligible service even if you do not purchase it (this includes most leaves taken under the Employment Standards Act, 2000 like pregnancy and parental leaves). Other types of purchasable service like service under another RPP or certain leaves of absence (including “authorized leaves”) will only be recognized if you purchase it. If you have both types of service available to purchase, you may wish to prioritize purchasing the second type to grow your pension and help you reach an unreduced early retirement date faster.
Service purchased through a buy-back is not considered under the OMERS OMERS Retirement Compensation Arrangement (RCA). This means that if you are paid at a certain level, the OMERS RCA will not apply to purchased service and your benefit will be capped by the Income Tax Act (ITA).
The ITA governs the service you can purchase in the Plan, methods of payment, maximum purchase limit and deductions you may be eligible for when completing a purchase.
The ITA also contains restrictions on how you can pay for a buy-back. Depending on your available RRSP room, some periods must be paid for through a transfer of funds from an RRSP, LIRA or RPP. When you request a costing, the buy-back package outlines any payment restrictions that apply to your past service.
There are also limits on the amount of the benefit you receive for the service you buy back. For example, service after 1991 has an annual limit that changes each year (in 2025, this limit is $3,756.67).
The source of the funds used to purchase your past service will have certain tax implications:
Funds transferred into OMERS from your AVCs, RRSP, LIRA or RPP are already tax-sheltered. You cannot claim them again as a tax deduction for a service purchase.
If you pay for the service purchase in cash (i.e., by personal cheque, money order, as a bill payment through your Canadian bank or through a monthly payment plan), all or some of the amount may be tax-deductible, depending on when the service occurred. The annual interest for the monthly payment plan is tax-deductible.
If you borrow money from a financial institution to purchase service, the interest is not tax-deductible. OMERS will issue a tax receipt for the amount received in each tax year.
The ITA governs the service you can transfer into the Plan. Contributing to a pension plan uses up some of your RRSP room. When you purchase past service, OMERS must ensure that you have the available room to make contributions to a pension plan under the applicable ITA rules. This often requires contacting the CRA to approve or “certify” a PSPA, particularly if you are using cash to make the purchase, before your purchase can be finalized.
In each year that you accrue a pension benefit, a Pension Adjustment (PA) is calculated and reported to the CRA on your T4 slip. The PA reduces your RRSP contribution room for the following year to account for the pension that you accrued. When you transfer from one DB plan to another, total PAs calculated by the previous pension plan are compared to total PAs calculated by OMERS to determine if additional RRSP room is required. PSPA certification would be applied for with the CRA if additional room is required.
The cost of purchasing past service may be tax-deductible and could affect your RRSP room depending on the type of service, when it occurred and how you pay for it. The tax deduction applies in the year the payment is made or may be carried forward to apply in subsequent years.
When the service occurred | Portion of the cost that is tax-deductible | Deduction limit per year | Carry-over |
|---|---|---|---|
Service period after 1989 | Total cost | No limit for the year of purchase | No carry-over |
Service period before 1990 while you did contribute to an RPP | Total cost | Lesser of: 1) the amount paid or carried forward or 2) $3,500, minus all other OMERS contributions | Carry-over the deduction until the balance = $0 |
Service period before 1990 while you did not contribute to an RPP | Lesser of: the total cost or $3,500 x years or part-years purchased | Lesser of: the amount paid or carried forward or $3,500 | Carry-over the deduction until the balance = $0 |
If you belonged to another defined benefit (DB) pension plan before OMERS and your benefit is still with that plan, you may be able to transfer that service to the OMERS Plan.
If you return from a leave, you may be able to purchase that leave to add to your OMERS credited service.
Explore ways to increase your retirement savings by investing in the OMERS Fund.